THE RATIONALITIES OF DECLINE TRADE UNION MEMBERSHIP IN UK

Abstract: Trade unions are organizations of workers that seek through collective bargaining with employers to protect and improve the real incomes of their members; to provide or improve job security; and to lobby for better working conditions. The choice of workers to be a member of the trade union is to some extent depends on employers attitude and behaviour towards unionization. The greater the extent to which an employer is prepared to recognize a union, the more likely workers to be unionized. This attitude and behaviour in turn may be affected by government policies and structural changes in employment in the British labour market such as from manufacturing to services, from manual to non-manual employment, and from full time to part time work. This paper tries to discuss initially the reasons why trade union membership declined. This then followed by a discussion on the impact of membership decline on trade unions collective bargaining power, financial wellbeing, workplace recognition, union authority to regulate workplace employment relationship and training. Key Words: Trade union, Trade union membership, Multi-unionism, collective bargaining, Trade union density.

1.0 Introduction
Trade unions are organizations of workers that seek through collective bargaining with employers to protect and improve the real incomes of their members; to provide or improve job security; and to lobby for better working conditions. The main functions of trade unions are to represent their members in an organization and negotiate with employers on behalf of their members (Freeman and Medoff, 1984). The functionality and power of trade unions, among other things, depends on their size in number. Over the last three decades, trade unions memberships have been falling across most advanced economies. Union membership in UK was 13.2 million in 1979 and the figure now stands at 7.7 million (Achur, 2010). In Britain, between 1999 and 2009, trade union membership density on average fell by 3.5 and 4.0 percentages in the public and services sectors, respectively (Alex and John, 2010). 1

This paper tries to discuss initially the reasons why trade union membership declined. This then followed by a discussion on the impact of membership decline on trade unions collective bargaining power, financial wellbeing, workplace recognition, union authority to regulate workplace employment relationship and training.

2.0 Reasons for Decline in Trade Union Membership

The workplace union representation and collective bargaining are largely voluntary in Britain. Over the last two decades, there has been a considerable reduction in the extent of union involvement in workplace regulation (Millward, et al., 2000). Membership density and recognition for collective barging have fallen by a half since the mid 1980s, with just 15 percent of private sector employees now belonging to unions and 18 percent having their pay set by a collective agreement (Achur, 2010). The debate over the determinants of trade union membership has gone through a number of significant developments since Bains et al.s seminal structuralism thesis of the mid-1970s. Researches so far done on this issue have identified the following factors as determinant of trade union members decline: The business Cycle and the change in the composition of workforces and jobs. Bain and Elsheikh (1976), Bain and Prices (1983), Metcalf (2003), Disney (1990); Hollinshead, et al., (2003). The stance of the state and the attitude of employers. Bain and Elsheikh (1976), Bain and Prices (1983), Metcalf (2003). The strategic approach and structure of the unions. Metcalf (2003).

2.1 The Business Cycle

The business cyclical factors consist of wage growth, inflation and unemployment. Bain and Price (1983) hypothesized that there is a relationship between the wage rise in relations to inflation and the tendency to join unions. They suggested that workers would like to join unions in the periods where the inflation is higher than the increase in wages in attempt to defend or improve living standards. However, high and rapid rising of unemployment level have a significant negative impact on union growth, since unemployed people have little incentive to remain in membership (Bain and Price, 1983, Disney, 1990). . 2

A similar research conducted by Carruth and Disney (1988) using U.K data suggest that in the short run, union membership increases in line with increase in employment and prices rises. In the long run, there is an inverse relationship between real wage and trade union membership. An increase in real wage is accompanied by a decrease in trade union membership. This explanation reflects the situation in 1980s where a combination of rising unemployment and high real wage resulted in a decline in trade union membership (Hollinshead, et al., 2003). The business cycle framework or reasoning, however, doesnt apply for the situation since 1993 which has been characterized by a fall in unemployment and union density (Metcalf, 2003)

2.2 Changes in the Composition of Workforces and Jobs

Many scholars have put forward these issues as key factor that explain for declining membership and density in Britain (Bain and Price, 1983; Disney, 1990). They argue that the shift of the economys dependency from highly unionized sectors like manufacturing, mining, utilities and the public sector to a service and private sectors, and the rise of the female workforce have negatively affect trade union membership. The increase of density among women in the services industry imposes difficulty for trade unions to organize themselves (Disney, 1990; Hollinshead, et al., 2003). Metcalf (2003:5) asserts, however, that the change in the composition of the workforce and employment played a fairly modest role in accounting for the fall in density and membership in 1980s and 1990s. Evidence from the British Social Attitude Survey confirms that of 5.5 million losses in membership, in between 1 million and 1.7 million attribute this factor.

2.3. The State Policy and Activities

Metcalf (2003) argue that the state can influence union membership directly and indirectly. Directly: through its legislation that may hinder or promote union security. Indirectly: through creating an environment in which employers and union operates. In 1970s Labour legislation substantially strengthened unionism; and in 1980s Thatcher legislation shifted the legal balance against unions. Legal reforms undertaken by the Conservatives created more difficult for unions to organize, to take industrial action or to form a closed shop (Hollinshead, et al., 2003).

The magnitude escalated over the last two decades. The state did what it could to undermine collectivism through successive trenches of industrial relations legislation which permitted a union to be sued, privatization, contracting-out and the introduction of performance related pay for its own employees. These state policies and activities have encouraged for employers to oppose unionization and increased the cost for trade unions to organize the members (Metcalf, 2003; Hollinshead, et al., 2003, University of Leicester, 2007).

2.4. The Employers Attitude toward Trade Union

The choice of workers to be a member of the trade union is to some extent depends on employers attitude and behaviour towards unionization. The greater the extent to which an employer is prepared to recognize a union, the more likely workers to be unionized. This attitude and behaviour in turn may be affected by government policies and structural changes in employment in the British labour market such as from manufacturing to services, from manual to non-manual employment, and from full time to part time work (Disney et al., 1995). In late 1960s and early 1970s, the British legislative framework for union recognition was favourable. The passing of Health and Safety at Work, Employment Protection, and Trade Union and Labour Relations Acts avowed the principles of union recognition and encouraged employers along this path. In the 1980s industrial relations legislation, however, impaired union security and encourages employers not to recognize trade unions (Freeman & Pelletier, 1990).

2.5. The Structures and Policies of the Trade Unions

Disney (1990) argues that trade union policies, structure and strategy affect trade union density. Trade union leaders have grate role in the recruitment of members, and in barging relationship they build with employers and government. Metcalf (2003) suggest that the unions policies in those regards and structure multifaceted the problems of a hostile state, resentment from employers and the growth of individualism. He argued that the structural changes to decentralization and multiunionism (i.e. more than one union in the workplace) had weakened the collective bargaining power of the employees, increased strike record and lowered financial performance than in similar workplace with just one union.

Multi-unionism may be a problematic for both employers and trade union. From employers perspective the existence of multi-unions means dealing multiple negotiation which increase both time and cost. From the trade union perspective, inter-union conflict can undermine bargaining tactics and solidarity, or encourage competition and divisions within an industry and organization (Hollinshead, et al., 2003).

3.0 The Impact of Decline in Trade Union Membership

The decline in trade unions membership and density might have effect on: 1. their collective bargaining and wage premium 2. their power in the industrial and political setting of the country 3. their financial wellbeing 4. Job training and other working conditions.

3.1. Impact on Trade Unions Collective Bargaining and Wage Premium

Most trade unions have as their primarily goal the negotiation of higher wages and benefits for their members. These goals are usually the most stridently persuaded as it is generally the most pressing concern of members (Arthur et al., 1986). During, recessionary periods, unions have the goal of at least maintaining their members level of earnings and preventing erosion of income due to inflation and employer policy. And during economy boom, they ask wage premium for the members over those who are not part of the union through unions collective bargaining activities (Freeman and Medoff, 1984). From the previous section discussion that highlighted to what extent trade union membership has declined, one may assume that declining union membership and collective bargaining coverage imply a lower union wage premium. This of course depends upon whether those instances of union organization that disappeared were weaker or stronger than average. Empirical evidences suggest that the union wage premium in Britain had declined in magnitude during the 1980s and 1990s. The 10% wage premium enjoyed by union members in the mid 1990s, declined to 8% between 1997 and 2002, and further fall to 5% in 2009 (Alex and John, 2010 ). There may different explanation for this trend. For instance, Blanchflower and Bryson (2003) associated the change in wage

premium with the rise and fall of unemployment over the 1980s and 1990s. The reason extended by these scholars is that unions may have been more successful than non-union workers in resisting downward pressure on wages during the downturns. Bryson and Forth (2006), however, argue that decline in trade union members due to increase in free-riding has weakening unions power in organization to negotiate for higher wage.

3.2. Impact on Trade Unions Power

The combination of employees within trade union forms power that would enable them to have say in the workplace environment as well as in the government. Forming a trade union, however, doesnt it self guarantee of having power. This depends on the size of the trade union and the way the leader deploy their resources (Hollinshead, Nicholls, and Tailby, 2003). Coates (1983) suggests that the extent of trade union power should be analyzed in wider context that is in relation to the employer and the machinery of the state such as courts and or policies. Employer and unions have access to varying sources of power through which they may achieve their goals. There is a continuous process of power release and testing between the parties. The balance of the power is in a constant state of flux, and is dependent on a variety of environmental and organizational factors. The states role is further complicated by the fact that it is also an employer. Power testing occurs at all levels of an organization. Power testing also occurs at a macro level, where unions may challenge the state for example; by demonstrating against increases petrol price or increase in taxes (Freemen and Medoff, 1984; Hollinshead et al., 2003). Flander (1970:27) argue that trade union power may have influence in industrial and political setting of a country. Once they have been recognized by the employer, trade union power do exist over a range of issues such as working conditions, wages, or the speed of work. The ability of the unions to negotiate increases above the inflation rate during the 1970s early 1980s was due to their power at the time. In theory, trade unions power may have a negative influence on firm performance. If they could manage wage premium through collective bargaining they would reduce profitability keeping other things constant. On the other hand, the existence of trade union power can enhance performance through voice effects which raise labour productivity and improve managerial decision-making, by acting as an agent for the

employer in monitoring workers, or in assisting with organizational change (Freeman and Medoff, 1984). Empirical evidence documented negative effects of trade unions power and activities on the firms financial performance and this has been put forward as one cause of union decline (Hirsch, 2008). In political setting unlike in other countries trade union in Britain set aside the 1960s and 1970s the periods of corporatism when they were represented on tripartite bodies along with employers organization and state representation, sought limited influence over government policy (Hollinshead et al.,2003). . Hollinshead et al., (2003:86) has identified the following factors as indicators of trade union power. 1) Union membership in its totality, and membership density. 2) The more or less favourability of the general political and legal climate in supporting or encouraging trade unions. 3) Employers recognition of trade unions in the workplace and their willingness to negotiate with unions. 4) The degree of union activities and facilities at workplace level. 5) The general economic and business environment such as the level of unemployment and the product market conditions. As it has been discussed in the previous section, since 1980s trade union membership and density has been declining, the state and employers has been following a policy that discourage unions, and the trade unions themselves have been changing their structure and policy. All these factors have produced a less favourable environment for the trade unions and consequently they have lost to some extent their power over employers and state. But this does not refer to all trade unions. As Coates (1983) pointed out not all unions have equal power and strength. Their power depends on the strategic importance of the members for the industry or the economy as a whole. For instance, transport workers and workers in the emergency services may have more power than worker in the other industry. Hence, although generally speaking it could be say the decline of trade union membership has negatively affect trade unions power; in some industry trade unions remain powerful (Coates, 1983).

3.3. Impact on Trade Unions Financial Wellbeing

In Britain, there is no state funding of trade union and thus the ability of the unions to recruit and retain members is crucial as their survival or functionality depends on that. The dramatic fall in trade union membership, and trade union density over the last two decades represented a crisis for trade unions (Alex and John, 2010). a) Employment. On average, employment in a unionised workplace falls 3% more than in a similar non-union workplace (Metcalf, 2003). The percentage of all employees who have never been a union member doubled between 1980s and 1990s as a result of a decline employer and government support for union membership. This trend continued to rise in the past and by 2006-2008, half of all employees were never members (Alex and John, 2010).This may suggest that workers have less incentive to join unions. If this trend continues, it would have serious implication for future membership levels and financial performance of the unions. b) Free Riders. According to Metcalf and Fernie (2005) of the total 8.7 million workers covered by collective bargaining, 3.3 million of these are free riders. This share is raising, which constitutes another danger sign for trade unions since they are incurring the costs of representing such workers in pay negotiations but receive no payment for this service in the form membership subscriptions. Considering the above two facts, it may be assumed that the trade unions are in financial difficulties. However, this is the not the case. Using the data from the Certification Officer, Alex and John (2010) examined trade unions financial position over the period of 2000-2008. The figures below shows, the total income (the dashed line) of the trade unions slightly exceed their total expenditure (the dotted line) in periods 2000 and 2001. In between 2002 and 2003 they were almost equal. Since 2004, however, their financial position has been improved by increasing revenue whilst keeping expenditures under control. According to Alex and John (2010), half of the extra income has come in the form increase in the membership fee from 90 pound per annum to 100 pounds, and the remaining probably from disposal of duplicated assets after mergers. This finding proved that despite the continued decline in membership, the trade unions financial position remains healthy (Alex and John, 2010).

Figure 1: Trade Unions Financial Resources, 2000-2008

Source: Alex and John (2010:11)

3.4. Impact on Job Training and Other Working Condition

Trade union recognition and their power may have effect on the extent to which employees are provided with training and the amount of training. The potentional union effect on workplace training provision has been examined in different periods. Using 1998 Workplace Employment Relations Survey (WERS) Bonhiem and Booth (1998) had statistically analyzed the relationship between trade union activity and training in the British workplace. This survey was conducted during the early days of the first Labour government when there was positive climate for trade union activities. The result showed the levels of training incidence were higher in union recognized. Statistical analysis of Hoque and Bacon (2006) was using the data from the same survey, however, contested Bonhiem and Booths (1998) finding. They found no relationship between the presences of trade union recognized workplace and training incidence. As a continuation of the previous studies in 2007 Stuart and Robinson conducted a comprehensive research using the 2004 authoritative WERS dataset that explored the relationship between trade union representation and training activity in British workplace. They found positive relationship. Union recognition makes difference in terms of the extent to which employees receiving training, or not, and the amount of training that is received. The result documented that where the trade unions are 9

recognized and negotiate over training, employees are 23.9 per cent more likely t report having received some training and 4.1 per cent more likely to report receiving 10 or more days training (Stuart and Robinson, 2007:4). Although there is no research that show a relationship between a decline in trade union density and training incidence, one can infer that conclusion from previous discussions. If trade union recognition by employers had been declining over the last decades, their ability to negotiate collectively over training obviously has been declined.

4.0 Conclusion
The main objective of trade unions is to maintain and improve workers terms and conditions of members of the union through collective bargaining with employers. Their success depends on their barging power and this in turn depends on the trade union density. The last three decades trade union membership and density had decreased. Scholars factored the business cycle, change in the composition of workforces and jobs, unfavourable stance of the state against trade union, negative attitude of employers towards trade union, and the strategic approach and structure of the unions as explanatory factors for the decline of trade union membership and density. What ever could be the reason; this trend has made unions in majority settings weaker now than in the past. The wage premium they were enjoying has declined from 10% in mid 1990s to 5% in 2009; and their power to influence in the industrial and political setting of a country has diminished. Despite this trend, however, the trade unions financial position now looks healthier. This doesnt mean, nevertheless, their position as a union is strong. Unless they have turned up the trade union membership and density, their long term survival will be questioned. To this end, either there should be an increases in employment in unionized sectors of the economy relative to non-unionized employment or unions should re-organize themselves in a manner that appeal to both employers and potential members. This may involve adopting partnership with employers and providing better services to individual union members.

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